How The Angie’s List and HomeAdvisor Merger Will Impact Your Water Damage Business

HomeAdvisor’s parent company IAC announced in May that they had acquired Angie’s List for $500 million dollars. The announcement was hardly a surprise, IAC has been courting Angie’s List for the last several years. When the merger closed in October, the two companies were reorganized as ANGI Homeservices.

Although there were a number of layoffs at Angie’s List in September, CEO Chris Terrill said he was looking to “reignite the brand” and hinted they may be hiring in the future. The one thing that ANGI Homeservices hasn’t said is what this means for the future of the two websites and their customers and contractors.

However, companies don’t buy other companies without a plan that almost always involves growing revenue. While they can grow revenue by attracting more customers to their websites, they can also do so by raising rates on contractors as well.

Background on Angie’s List

The Angie’s List website launched in 1999. Since consumers paid for access, there was a perception that they were more serious buyers and that reviews carried more weight. They launched their freemium model in 2016, offering access to their ratings and reviews for free.

Background on HomeAdvisor

Launched as ServiceMagic in 1998 and rebranded as HomeAdvisor in 2012, they offer consumers free access to listings and reviews for contractors. Plagued by complaints, they have added enhancements aimed at improving the consumer experience, including the TrueCost Guide.

What The Merger Means For Consumers

Whether the Angie’s List and HomeAdvisor websites continue to operate separate or they merge together in the future, their customers are consumers looking for home service contractors. Without that customer, neither site can generate revenue.

As competition from Google and Amazon increases, they will need to offer greater value to continue to attract those consumers. This might include more advertisements, a stronger service guarantee similar what Google Home Services offers, or adding more verticals like Amazon Home Services.

No matter how they target more consumers, there will be an expense associated with doing so. Although they could offer added premium subscription tiers for consumers to access these features, it’s more likely that they will pass along the costs to contractors through increase rates.

What The Merger Means For Your Water Damage Business

For the time being it appears that both sites will continue to operate separately, as IAC already does this with several popular dating websites. While consumers would likely be unaware of any change, both sites could slowly increase advertising rates and fees for jobs.

It’s also possible that the two sites will slowly merge together over time to compete against similar services provided by Google, Amazon, Thumbtack, and others. In this scenario, they will need to raise rates on contractors to match the reach of Google and Amazon.

While this is all speculation, ANGI Homeservices is looking for 20 to 25% growth over the next five-years. More customers lead to more revenue, but it’s unlikely they can rely solely on consumer growth to meet their financial goals given increased competition. The biggest area for growth will likely be on the contractor side, taking a higher percentage for the services you offer.

Where does this leave your water damage and disaster mitigation business? Despite increased rates, Angie’s List and HomeAdvisor may be beneficial for your business, they may not. No matter what happens with ANGI Homeservices, you can no longer rely on a single marketing channel for water damage jobs.

The most effective way to ensure your success is to have a multichannel strategy. This way, if one channel changes you still have other sources for new leads and jobs.